FG disowns NCC, telecoms operators on tariff hike

By Prince Osuagwu, Hi-Tech Editor, Henry Umoru & Emmanuel Elebeke
ABUJA — Minister of Communications, Mr. Adebayo Shittu, yesterday, absolved the Federal Government of complicity in the bid by the Nigerian Communications Commission, NCC, to increase the price consumers pay on data services.
The Minister distanced his ministry from the controversial data tariff increase, denying that it authorized it.
This came as the Senate also, yesterday, condemned in totality the planned tariff increment and asked network providers to immediately stop implementation of the new tariff billed to take effect today.
Reacting, telecoms regulator, the Nigerian Communications Commission, NCC, announced immediate suspension of the new minimum pricing template for data services by mobile operators in the country, explaining that its decision was informed by the need to make more consultations.
Speaking on RayPower FM’s Fact File programme, yesterday, Adebayo maintained that the Federal Government never issued any directive to either the regulator, the NCC, or the telecommunications operators in the country authorizing increases in prices of data from today as claimed.
I wasn’t consulted — Shittu
Shittu insisted that he was never consulted before the announcement was made, stressing that the government did not authorize operators to raise tariffs.
He, however, assured Nigerians that the government would look into the matter and continue to protect their interests.
“I can tell you that I was never a party to it (data tariff hike). Government never gave any such instruction. This government believes in democratic process and we would continue to protect the interest of Nigerians,” he said.
Adebayo-Shittu, Communications Minister
Senate condemns tariff hike
On its part, the Senate condemned in totality the tariff increment by service providers in Nigeria and asked network providers to immediately stop the implementation of the new tariff billed to take effect today.
Noting that the new tariff regime was ill-timed and anti-people, because of the present economic situation in the country, the Senate summoned Shittu, NCC, and network providers to appear before its Committee on Communications to intimate it on why they must increase data tariffs.
The Senate also asked its Senator Gilbert Nnaji-led Committee on Communications to commence a comprehensive investigation into the matter that has, among others, generated controversies across the country and report back within one week.
The resolutions of the upper chamber were sequel to a motion moved by Deputy Senate Leader, Senator Bala Ibn Na’Allah, during which he condemned the planned hike in data tariffs, saying it would further impoverish the people.
It will be recalled that some telecommunications service providers had issued statements to customers, through customised Short Message Services, SMS, intimating them of imminent plans to increase tariff on all mobile data purchased with effect from Thursday, December 1, 2016.
According to service providers, the development is in connection with new guidelines by the regulator, NCC.
Also speaking, Vice Chairman of the Committee on Communications, Senator Solomon Adeola (APC, Lagos West), who described the policy as not only ‘unholy’ but also ‘unfriendly’, however, assured the Senate that the committee would act on the mandate and report back to it next Tuesday.
“We are up to the task, and I can assure the Senate that we will swing into action immediately.
“We will invite all the necessary agencies that are involved in this policy that is unholy and unfriendly and get back to the Senate unfailingly on Tuesday,” Adeola said.
In his remarks, Senate President, Bukola Saraki, who accused the NCC of failing to carry out enough consultations before announcing the policy, also asked the committee to investigate allegations of non-compliance with laid-down regulations by telecoms operators.
NCC had in a letter addressed to telecoms operators on November 1, 2016, put the interim floor price for data services at 0.90k/MB for big operators, adding that “this rate will subsist, pending the finalization of the study on the determination of cost-based pricing for retail broadband and data services in Nigeria.
“In order to provide a level-playing field for all operators in the industry, small operators and new entrants to acquire market share and operate profitably, small operators and new entrants are hereby exempted for the price floor for data services.
“For the avoidance of doubt, a small operator is one that has less than 7.5 per cent market share and a new entrant is an operator that has operated less than three years in the market. All operators are to ensure that subscribers are not automatically migrated to pay-as-you-go platform. Also, note that effective date for the interim price floor is December 1, 2016.”
Acting on this directive, some telcos sent text messages to their subscribers on Monday, announcing the hike in its data tariffs beginning today.
NCC announces suspension
Meanwhile, NCC, yesterday, announced the immediate suspension of the new minimum pricing template for data services by mobile operators in the country.
NCC’s Director of Public Affairs, Tony Ojobo, said the decision to rescind its earlier directive to telecom operators to commence charging the new floor price rate for data from December 1, was to allow for further consultation with industry interest groups.
He said: “Following concerns that visited the directive to introduce price floor for data segment of the telecommunications sector, beginning from December 1, 2016, the Nigerian Communications Commission, NCC, has suspended any further action in that direction.
“The decision to suspend this directive was taken after due consultation with industry stakeholders and the general complaints by consumers across the country.”
Ojobo said the commission had already asked all operators to maintain the status quo until conclusion of study to determine retail prices for broadband and data services in the country.
Prior to the suspension, Nigerians had raised concerns about the impropriety of the decision to hike data tariffs at this time.
Nigerians accused the NCC of insensitivity, considering the high cost of living in the face of the current economic recession in the country.
Social media users expressed fears the government planned to limit citizens’ access to the Internet.
On November 1, the commission, after a consultative meeting on October 19 with all mobile network operators in the country, wrote to them on the need to determine an interim price floor for data services.
In the memo, the telecom sector regulator justified its decision to have a price floor, claiming it was primarily to promote a level playing field for all operators in the industry, encourage small operators and new entrants.
The price floor of N3.11 kobo per megabyte of data in 2014, it recalled, was removed in 2015, pointing out that the price floor that was supposed to flag off on December 1, 2016 was put at 90 kobo per megabyte.
Although the commission said smaller operators, by virtue of their small market share, were exempted from the now suspended price regime, it said the decision on the floor price was to protect the consumers who were at the receiving end.
The commission said the decision was equally to save the smaller operators from predatory services likely to suffocate them and push them out of business into extinction.
“The price floor is not an increase in price, but a regulatory safeguard put in place by the telecommunications regulator to check anti-competitive practices by dominant operators,” Ojobo said.
He denied the regulator had fixed prices for data services, pointing out that “the NCC does not fix prices, but provides regulatory guidelines to protect the consumers, deepen investments and safeguard the industry from imminent collapse.”
Labour warns
Before the reversal, The Trade Union Congress of Nigeria, TUC, had warned against implementing the policy, decrying what it described as “the extent government and its capitalist cronies would go to frustrate the lives of Nigerians.”
According to the Ag. Secretary-General, TUC, Comrade Simeso Amachree: “We feel particularly awful about the move because data is one of the cheapest ways to empower the teeming youth. This move, if allowed, would make it unaffordable. In our view, this is insensitive and criminal on the part of the parties involved.
“Naturally, we had expected that government would increase awareness for greater citizens’ participation especially in ICT, but unfortunately, they are doing the opposite. One cannot really situate the Federal Government policy direction these days; on one hand, the Vice President, Prof. Yemi Osinbajo is banking on ICT for youth empowerment, while on the other, the NCC is trying to cut youth participation. All the promises made to the Chief Executive Officer of Facebook, Mark Zuckerberg when he visited the country, cannot be achieved if the policy is implemented.
“The telecoms sector was often used as a case study to justify the removal of fuel subsidy. But the question is, is the telecoms sector truly deregulated? What happens to the issue of free market in the telecoms sector? There is so much deceit and insincerity in the system. We are calling on government to come up with godly policies that would encourage investment and stimulate growth, instead of deliberately trying to stifle businesses”he added.
Existing data tariff regime
Prior to the hike/floor of N0.90k/MB, the industry average for dominant operators, including MTN Nigeria, Etisalat, and Airtel Nigeria, was N0.53k per megabyte.
Etisalat offered (N0.94k per megabyte), Airtel (N0.52k per megabyte), MTN (N0.45k per megabyte) and Globacom (N0.21k per megabyte).
A comparison of the data prices by the major operators with that initially proposed by NCC shows that but for the reversal, majority of Nigerians would have had to pay between 90 and 300 per cent increase in data prices.
The smaller operators/new entrants, including Smile Communications, Spectranet and NATCOMS (NTEL), were allowed to charge N0.84k, N0.58k and N0.72k per megabyte respectively.
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